Revised Value Models: Properties and relationships

Value Model: Concepts / Properties:
(percentages represent how often the concept was found in consumers' experiences with 3G mobile phones; N=75,000 words).

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Value Model: Concepts / Relationships:

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Comments gratefully accepted....

Community vs Function: value dimensions contesting

'Monks', Apple loving fans, put off a Windows user, who prefers an inferior product 'I know Windows is awful' to being part of their community.

Good value leads to recommendations, but recommendations steal time and push one community's perspective onto outsiders, who may prefer to be outside, not inside that community.

Guardian writer, Charlie Brooker, explores his feelings towards the Mac evangelists, and towards Windows here. And covered on Fortune's Apple 2.0 blog here. Emotions sometimes trumps reason, so better products do not always make better sales (in the short term at least).

Simplicity: a value dimension

Da Vinci, 500 years ago said,
"Simplicity is the ultimate sophistication."

Simplicity is one of twelve value dimensions.

Who says value can't sell t-shirts. Buy t-shirt at link above ($18). Is the t-shirt good value? Did the price change your attitude? Stronger/weaker, positive/negative?

Attitude has two dimensions - strong/weak, positive/negative. New information creates a value assessment which shifts attitude. Attitude also endures, until new relevant information comes along.

Value model: 2D or 3D?

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Which number of dimensions do you prefer? The value concepts have been scaled in 2D so the relative size of circles relates to the relative frequency of the value concepts in the transcript data (first 2000 data points). In the 3D graph, the size of the spheres relative to each other shows relative frequency of concepts to each other, and to the unit cube (which shows 100%). Which do you prefer? I think the 2D version is simpler but less evocative. The 2D version shows a greater disparity between the central value concept and the lesser non-core concepts. Both are accurate in their own degree of dimensions.

Youtube monetises free value

When the videos are free, but you can download the tune from iTunes, it looks like a win win.

Now you only have to find some music you like.....

France searches for value replacement for GDP

The French Government has released a report on how to improve GDP to include wider social benefit, which I argue is a need to measure value. The report can be found here (pdf 3.2Mb), and the project home here. The Project Group is called “The Commission on the Measurement of Economic Performance and Social Progress”.

See the Economist article here. My comment on the Economist article - a value summary is below.

The Economist says "GDP was designed to measure only the value of goods and services produced in a country, and it does not even do that precisely". The problem with GDP is that value measured is only monetary, and does not include subjective value measures. Measuring innovation faces similar challenges, because an Innovation adds value - monetary and non-monetary. And value includes as your commenter's note: time, service, and your article mentions, protecting the environment, happiness. I am currently writing my PhD on Value and Innovation, from a subjective perspective, and note that defining value as a problem goes back to Aristotle. Aristotle states the problem as how does a builder and shoe maker come to an agreement on a fair exchange, given they are so different. Yet we do. We act on value all the time. Every time we choose something to buy, or give our support to, we are making value decisions. Value is complex, multi-dimensional, personal, contextual, dynamic, social and personal. No wonder a simple measure is not yet at hand (especially if Aristotle couldn't come up with one). Price and GDP are an estimate of value, but I look forward to a time when we solve our value measurement problem. I hope to write a book on the history of value, and examine how our ideas about value changed through the ages, and why are we interested in value now. See my blog on value at http://www.valman.blogspot.com for my findings to date, including my twelve dimensions of value, and value model of consumer behaviour.

Apple: 'great' 'amazing' - but variety spices life

Some commentators of the latest Apple iPod presentation noted too much repetition of their strongly positive value language:

- easy, great, amazing, incredible.

But one clever character edited their video and left just these adjectives in. Pretty entertaining.

Amazing is one thing, but we value variety (newness) as well as amazing.
Apple will likely have to rescript their presentations now, or become the butt of this joke.

500 Human Values

Humanity Quest has a portal of 500 Human Values. I reformatted the list into columns so you can read them more easily here - What do you value?

A few examples from S: shyness, sarcasm, sin, sincerity, sadness, snobbery.

And some great other models of visualing sustainability here. I guess there are about 100-150 models on this page. Wow!

The Value of Information

Interesting link from publishers - http://informationarchitects.jp/the-value-of-information/

They identify five dimensions of information value:
- monetary
- artistic
- academic/scientific
- practical eg maps, manuals
- entertaining

therefore you should be prepared to pay.....?

Yes, information has value, but it depends on the context and the individual, need etc etc etc.
Interesting though....

Worse is better, Less is more

1.The Economist (When less is more 14.08.09) and Wired Magazine (The good enough revolution: when cheap and simple is just fine 24.08.09) have recent articles showing consumers preferring less to more - where less means less function and lower price, rather than high price and high quality.

Wired cites MP3, Skype, Google text ads and Flip handycams as examples.

The Economist cites the Eee PC, and Flip cam corder.

A Value interpretation: - do more for less $$: get 80% function at 20% price. New value dimensions offer new value elements, superseding old.

Examples:

- Wikipedia: (new) 24/7 convenience, good enough > (old) big, leather, reliability

- iPhone apps: (new) small, cheap, portable, easy, good enough > heavy, big, feature laden laptops, desktops

Summary: Power, price, potential, convenience > size, weight, function, brand.

2.The Economist also cites a 1991 paper on Lisp programming which focuses on simplicity from the MIT/Stanford style of design: simplicity, correctness, consistency, completeness.

A great quote, which could have something to say about PhD complexity....

The big complex system scenario goes like this:

First, the right thing needs to be designed. Then its implementation needs to be designed. Finally it is implemented. Because it is the right thing, it has nearly 100% of desired functionality, and implementation simplicity was never a concern so it takes a long time to implement. It is large and complex. It requires complex tools to use properly. The last 20% takes 80% of the effort, and so the right thing takes a long time to get out, and it only runs satisfactorily on the most sophisticated hardware.

The diamond-like jewel scenario goes like this:

The right thing takes forever to design, but it is quite small at every point along the way. To implement it to run fast is either impossible or beyond the capabilities of most implementors.

…

The right thing is frequently a monolithic piece of software, but for no reason other than that the right thing is often designed monolithically. That is, this characteristic is a happenstance.

The lesson to be learned from this is that it is often undesirable to go for the right thing first. It is better to get half of the right thing available so that it spreads like a virus. Once people are hooked on it, take the time to improve it to 90% of the right thing.

Gabriel, R.P. 1991 Lisp: Good News, Bad News, How to Win Big, http://dreamsongs.com/WIB.html, viewed 01.09.09

Substitute PhD for software, and you have an indictment of the high quality, but very slow.... PhD process. ouch!

Simon de Beauvoir - value in words, truth

Reading Holland (2002) introduction to de Beauvoir. She quotes - "I am an intellectual. I take words and truth to be of value." Force of Circumstance, p.378.

Truth is part of the new/learning Value Dimension. Truth is a community and socially constructed concept (Berger & Luckmann 1967). Words and truth relate to 'power', 'community' - both social value dimensions.

BrandIndex

BrandIndex tracks 1,100 consumer brands over 32 sectors on a 7 point profile - ("Buzz", General Impression, Quality, Recommend, Satisfaction, Corporate Reputation & Value). About 2,000 British adults are interviewed daily. They say "BrandIndex takes high-quality, high-relevance data and puts it straight into the hands of decision-makers, so the reporting tool has been designed to suit the style of decision-makers: it’s clear, it’s easy and it’s instant. "

This is close to Value Management, but more like Image Management.

Their best brand booklet from 2007 (UK) is available here.

Community Value: OpenStreetMaps (OSM)

   

A terrific example of a community creating value, I came across yesterday, in looking for a way to use maps on my iPod Touch, while out and about.

I found the iPhone app (Cost: AUD4), OffMaps, which uses, Cloudmade route checking free protocols, on top of Open mapping system - OpenStreetMaps. A company which provides support (Itoworld.com) made a video showing how much data has been added to OpenStreetMaps in 2008. See below.

OSM 2008: A Year of Edits from ItoWorld on Vimeo.

Enjoy, and contribute.
Cheers
rf

iPhone 3Gs - price analysis - Australian Phone companies

I have analysed the iPhone 3GS against several price dimensions, including Provider, Monthly price, and Price per GB (gigabyte) of data (as at July 2009). A separation appears between the five phone companies, charging either low monthly price, and high data costs or high monthly price and low data costs.

A Value Frontier appears, that I have graphed.

The analysis has been distributed to a few phone companies, and iPhone retailers for comment. Feel free to comment below.

The summary analysis can be found here (link). Cost $500. Free to download (Donate requested). A fuller report can be obtained by donating $500.

A similar analysis of 3G Mobile broadband from 2005 - 2008 is also available, comparing 3G Australia prices to fixed broadband, and International Mobile broadband prices. Cost $500. Free to download (Donate requested). The mobile broadband analysis can be found here (link)[Appendix 11 of PhD].

Updating thesis - What is value? How does value work?

Jun 09 - Valuing is a process of examining our changing environment and circumstances, in conjunction with others, to drive our actions, strategies and attitudes, including innovator offers of new technology. Valuing involves making a value assessment, based on aggregating 12 value dimensions, which is stored and remembered as strong to weak, positive or negative attitudes. Consumers determine shifting coping strategies, based on their ongoing experiences, such as trusting, doubting and minimising. Value assessment strategies, include exploring, comparing, recommending, filtering and closing. Value elements are balanced in making a value assessment. Value elements are potentially limitless combinations of value dimensions, in a particular instance. A complex value assessment may typically balance between 20 and 30 value elements. Value dimensions are:

• individual (simplicity, new/known, emotion, beauty),
• social (duty, power, community/privacy, need/pleasure) and
• universal (price, function/fun, service/reliability, time).

Value dimensions are polar, and consumers may value either end of a pole, for instance - high price/low price, fast/slow, new or known.

Nov 06 -
Value explains consumers decision to adopt new technology. A successful technology, or innovation adds value. A failed innovation fails to add value.

What is value? We define value as :
the personal, individual, unique assessment
of costs, benefits and risks reflecting individual circumstances
that leads to a purchase decision / choice or attitude.

Value Propositions:

• P1: Value is dynamic


• P2: Value changes on the assessment of new information


• P3: Value is different for different people


• P4: The time to make an assessment affects value


• P5: Value degrades over time


• P6: Value is not measured in dollars; includes time, effort, hassle and pleasure and is measured in attitude, and purchase decisions


• P7: Value is path dependent


• P8: Value may involve input from others


• P9: Value causes purchasing

Assessing the Value of the Australian NBN (National Broadband Network)

Malcolm Turnbull (Leader of the Opposition)comments on the economics of the NBN today in the Australian - http://www.theaustralian.news.com.au/story/0,25197,25329883-5015664,00.html
Since no comments seem to be making it in, here is my comment on the Opposition leaders assumptions.



   

Prime Minister Rudd, and Opposition Leader Turnbull.

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My assumptions are online at : https://web.archive.org/web/20120410065801/http://www.thejoie.com/welcome/docs/NBNcosts.xls (archive.org)

Background: Investment $43B, fibre to the home to 90% of homes, plus wireless to rest, giving 100Mbps to fibre homes, and 12 Mbps to rest. Prices, and consumer takeup unknown. Business case not provided. Announced here
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Mr Turnbull makes some good commercial sense in his article. I have made some estimates on prices and takeup, as well as costing the investment with interest and depreciation, and make the following comments.

MT assumptions:
Operating expenses 50%, depreciation 5%
Takeup of homes 50%, rest with competition
ISP $100pm, NBN (Ruddnet) 70% of $100pm : gives no economic return on investment

My assumptions:
Spreadsheet is online at: http://www.thejoie.com/welcome/docs/NBNcosts.xls.
Depreciation same, Interest as for depreciation
Takeup $200pm 10%, $150 20%, $100 30%, $75 40%, $50 60%, $30 80%

On these assumptions, even with no operating costs (and I think 50% is very high), interest and depreciation (5%) at $180m per month each, swallow the revenue of max $240M, leaving a shortfall per month of $120M plus operating costs, and excluding competition, and ISP profit.

Other benefits accrue to businesses, who also use the network. Looking at small, medium and large, I guess small might pay $200 20% takeup, $150 30%, $100 40%, and medium $2,000pm 10%, $1,000pm 20% and $500 30%, large $20,000pm 10%, $15,000 20%, $10,000 30%.

Even with business cost savings on Telstra prices of 50% for large, and 20% for small, and revenue expansion for large 5%, Medium 10% and Small 20%, the most extra revenue and benefit I can get to is about $80M per month.

Still a shortfall of $40M per month, plus operating costs, plus competition, plus ISP share.

So, there are a lot of variables here, and it is worthwhile to think through what they are, and what they are worth to us individually, as a family, and as a nation.

If a national project is worth $40M of national fervour (per month) then maybe it is worth it. If we can find another $40M of benefit elsewhere eg international reputation, proactive problem solving, then maybe there is value in the NBN.

Other downsides would include potential impact on other telecoms share value, to shareholders.

Long ago, Pliny once said: fortuna fortem favet, not long after Mt. Vesuvius erupted. Sometimes life is for living, and doing the big important things to make the world a better place. Fortune favours the brave. The NBN might cost us $40M a month ($2 per person per month), but setting an example to the world - PRICELESS.

Google : function vs aesthetics

Wired reports a clash in value dimensions - function vs aesthetics. A Google designer is leaving because the engineering data driven culture at Google is driving him mad.

Title: Google data culture drives designer crazy - and out here.

The comments are especially interesting showing the ongoing dimension clash between what works and what looks good. Google wants proof of what looks good, from user testing - the average best. Their data driven culture is good at answering what works fastest, but not so good at aesthetics. They tested 41 shades of blue to see which one had the best response from users.

Value dimensions are individual, and aesthetics perhaps more individual than function.

We are all equal, but some are more equal than others.

Fast Company 2009 Top 50 Most Innovative

Fast Company name Team Obama as the most innovative company in its 2009 list, beating out last years winner, Google #1, and Apple #2.

Team Obama is a value management case study - listen, respond, engage with your customers to deliver value to them. In return, they delivered their votes.

Team Obama is not a corporation, but an organisation, and value delivery does not need to be necessarily about profit, but it is all about delivering value. For Obama, this probably means - hope, the new, fresh thinking and approach. An ongoing example is the community consultation (see image top right) at www.whitehouse.gov, and the transition website at www.change.gov, and initiaitive like" Join the Discussion" - see here. See more on this in the NESTA Measuring Innovation Blog post.

Fast Company list is online here - here.

Measuring Innovation - UK Style

NESTA has nearly $2M (USD - 1M GBP) for measuring innovation projects. I tendered for the Measuring User innovation subproject.

There are four projects:
- measuring corporate innovation 500k GBP
- innovation growth accounting 250k GBP
- framework conditions for innovation 75k GBP
- measurng user led innovation 100k GBP

See details at Innovation Index, with Research Notes, and Guidelines for tendering.

Look at my tender for a value approach to measuring innovation, at a national level.
The key is engaging consumers to vote for which innovations create value for them, using a website, built for that purpose. Obama's change.gov website, and tools therein is a model for this approach.

Happy inauguration day!

Imagine. Create. Innovate.

Europe has decided 2009 is their year of Creativity and Innovation.

The goals are taken from their website www.create2009.europe.eu:

The European Year of Creativity and Innovation has the objective to raise awareness of importance of creativity and innovation for personal, social and economic development, to disseminate good practices, stimulate education and research, and promote policy debate and development.

The Year addresses a wide spectrum of related themes such as:

• fostering artistic and other forms of creativity through pre-school, primary and secondary education including vocational streams, as well as non-formal and informal education


• maintaining engagement with creative forms of self-expression throughout adult life


• cultural diversity as a source of creativity and innovation


• information and communication technologies as media for creative self-expression


• ensuring that mathematics, science and technological studies promote an active, innovative mindset


• developing a wider understanding of the innovation process and a more entrepreneurial attitude as prerequisites for continued prosperity


• promoting innovation as the route to sustainable development


• regional and local development strategies based on creativity and innovation


• cultural and creative industries including design – where the aesthetic and the economic coincide.

For your consideration.

Upside Down-novation (Denovation)

Innovation has traditionally defined around something ‘new’. Schumpeter talked of new products, services, business models (Schumpeter 1934), and indeed the ‘nova’ in innovation is Latin for ‘new’. Recent definitions of innovation have included the related concept of value and value creation. For instance, the Innovation Metrics project, sponsored by the US Department of Commerce, and whose board includes elite business and academics define innovation as ‘something new that creates value’. The 2008 Australian National Innovation Review uses a similar definition (Cutler 2008).

However, by linking innovation and value some terminology issues have arisen. I have been writing my PhD about how consumer understand value in a new technology. This research aims to better understand innovation from a consumer perspective, and uses consumer interviews and a grounded theory methodology (see Ferrers(2008)). Some terminology issues have arisen.

The first issue builds from Schumpeter’s idea of creative destruction. When innovation creates, it builds upon the destruction of the old ways. As innovation creates value, so it destroys value. But we seem to lack a word to indicate this destruction. If innovation is something new, which creates value, what do we call – something new which destroys value. My suggestion in this note is that we need a new term for this idea. Such a word emphasises the value impact of the new. We have innovation for a positive impact, and we need a word for a negative impact.

A few possibilities have come to mind. These words use negative prefixes to indicate destruction. Prefixes such as ‘un’, ‘contra’, ‘min’, ‘anti’, or ‘de’ could be used, and connected with innovation. Thus possibilities are un-novation, contra-vation, min-novation, anti-innovation and de-novation.

Value similarly suffers from a lack of negativity. This is a second terminology issue, Value can be a noun or a verb. Something has value or we may value something. Both meanings are positive. However, we seem to lack a word which means loss of value, or negative value. Elsewhere I have argued that value moves either up or down, with new information and relates to several dimensions such as price, time and function (Ferrers 2008). What I now argue for is a new terminology to capture this negative action and movement. A price rise or something that wastes our time destroys value, yet we would not call the change and innovation or new value. I propose that we call a loss of value event, a ‘devalue’ or ‘devaluation’.

In short, I portpose two new words to complement innovation and value. I suggest we use ‘denovation’ to be the opposite of innovation and use this word to denote something new which destroys value. Also, I suggest we use ‘devalue’ as the noun related to a loss of value. I look forward to you comments.

References:
Schumpeter, JS 1934, Theory of Economic Development (per http://en.wikipedia.org/wiki/Innovation)
Cutler T 2008, Australian National Innovation Review, available online at www.innovation.gov.au
Ferrers R 2008, Towards a value theory of innovation, DRUID conference, Copenhagen (online here).